A
Absolute advantage, 27
Absolute value, 40
Accounting profit,531–533,
539, 586
Actual investment spending,
169
Actual output, 185–186, 397
AD-AS model,190 –197
classic model of the price
level, 322
demand shock, 191–197
economic policy, 199–207
inflation, 327
long-run economic growth,
399–400
long-run macroeconomic
equilibrium, 194–196
short-run macroeconomic
equilibrium, 190–191
supply shock, 192–194, 197
ADM (Archer Daniels
Midland), 637
Administrative costs, 508
Advance purchase restrictions,
627
Adverse selection,782–784
Advertising, product differentia-
tion and
brand names, 671–672
location differentiation, 669
quality differentiation,
669–670
role of, 670–671
style, type differentiation,
668–669
Africa, economic growth,
381–383
Aggregate consumption
function,164 –166
Aggregate demand curve,
172–177
AD-AS model, 190–196
downward slope, 173–174
fiscal policy, 209
monetary policy, 309–310
movement along, 174
shifts of, 174–177, 444
Aggregate demand-aggregate
supply model. See
AD-AS model
Aggregate output,12,
112–115
actual, 186
aggregate demand curve,
172–173, 175
aggregate supply curve, 179,
181–188
Great Depression, 188
money supply increase,
316 –317
output gap, 196
recessionary gap, 195
short-run equilibrium,
190 –193
Aggregate price level,
142–143, 146
aggregate demand curve,
172–175, 177
aggregate supply curve,
179 –188
change in, wealth/interest
rate effects, 174
Great Depression, 188
long-run equilibrium,
194 –196
money demand curve,
271–272
money supply, 316–317, 322
short-run equilibrium,
190 –193
Aggregate production
function,374 –378
Aggregate spending, 106
Aggregate supply curve,
179 –187
AD-AS model, 190–196
long-run, 184–187
short-run, 179–184
Aggregate wealth, 166
Agricultural price floors, 82–84
Air Sunshine, 624–625
Airline industry
oligopoly and, 641–642
price discrimination,
624–627
regulation, 85
Allen, Paul, 227
Alternative input combinations,
706–707
American Economic
Association, 1
American Economic Review,8,
715
American Recovery and
Reinvestment Act, 209,
213
Amtrak, monopolies and, 614
Antipoverty programs, United
States, 768
effects of, 770 –771
means-tested, 769
social security, 769
unemployment insurance,
769
Antitrust policy,653,
754–755
Clayton Antitrust Act of
1914, 755–756
Federal Trade Commission
Act of 1914, 756
natural monopoly and,
756–758
Sherman Antitrust Act of
1890, 755
Apartheid, economics of, 715
Appreciates,420–424Arab-Israeli war, 197
Archer Daniels Midland
(ADM), 637
Argentina
bank runs, 245
debt defaulting, 301, 305
economic growth, 369,
379–381
fixed exchange rate, 432,
435
natural resources, 378
Arms race, prisoners’ dilemma
and, 649
Artificially scarce goods,
751–752
Assets
banks, 244
Federal Reserve, 264–265
financial, 224, 226–227
physical, 224
prices, macroeconomic
policy, 358–359
ATC (average total cost curve),
553–554
ATMs, money demand curve
and, 272–273
Australia
monetary neutrality, 318
natural resources, 378
Automatic stabilizers,161,
212, 298
Automobile industry
exchange rate and, 427
inventories, 168, 170
Autonomous change in
aggregate spending,
160, 209
Autonomous consumer
spending,162–164
AVC (average variable cost
curve), 554
Average cost,552–555, 564
Average cost pricing, 757
Average fixed cost,553, 564
Average revenue, 586
Average total cost curve (ATC),
553–554
Average variable cost,553,
564
Average variable cost curve
(AVC), 554B
Bailey, George, 245
Balance of payments
capital flows, 408–413
exchange rate, 419, 421–423
merchandise trade, 410–411
Balance of payments
accounts,408–413
Balance of payments on
goods and services,
410Balance of payments on the
current account,
410–413, 436
Balance of payments on the
financial account,
411– 414
Balance sheet effect, 258
Bangladesh, clothing
production, 27
Bank deposit,224, 229,
248–249. See also
Checkable bank deposit
Bank failure, 245
Bank holidays, 256
Bank of England, 253, 358
Bank of Japan, 253, 341, 359
Bank reserves, 243
Bank run,243, 245–246,
253–254
Banking system, 253–260
Banks,228–229. See also
Federal Reserve
assets, liabilities, 244
central, 253, 310, 315–316,
318, 358
commercial, 257, 264–265
crises, 254–255
Federal Reserve System,
262–266
investment, 257
monetary role, 243–251
money creation, 247–248
regulation, 246–247
Bar graph, 44
Barrier to entry, 571
Barter system, 232
Belgium, minimum wage, 84
Bernanke, Ben, 201, 295, 416
Bertrand, Joseph, 641
Bertrand, Marianne, 715
Bertrand model, 641
Big Mac index, 425–426
Black labor, 85
Black markets, 81
BLS (Bureau of Labor
Statistics), 120, 147, 161
Board of Governors, 255
Bond,104, 224, 226, 270
Bonus foods, 84
Bosworth, Barry, 374
Boxer, Barbara, 393
Brand names,671– 672
Brazil
agricultural boom, 388
coffee beans, 47, 59, 64
economic growth, 381
hyperinflation, 136–137
Brazilian Enterprise for
Agricultural and
Livestock Research, 388
Break-even price, 592
Bretton Woods, 435–436
Britain
Bank of England, 253, 358I-1
Index